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Power Integrations, Inc. PURCHASING TERMS AND CONDITIONS

Power Integrations, Inc. PURCHASING TERMS AND CONDITIONS

These Purchasing Terms and Conditions and the purchase order that they accompany sets forth the terms and conditions that apply to all purchases of goods and services by Power Integrations, Inc. from Seller . As used herein, “Order’ means these Purchasing Terms and Conditions and the terms and conditions on the face of the accompanying purchase order; “Seller” means the entity identified on the face of a purchase order as “Seller”; and “Buyer” means Power Integrations, Inc. and its subsidiaries and affiliates.  Buyer and Seller agree as follows:

  1. Acceptance;  Buyer’s Authorized Representative:  (a)  Seller agrees to perform the services (“Services”) and/ or provide the goods (“Goods”) described in this Order (sometimes collectively referred to as “Goods”), in accordance with these terms and conditions.  Seller’s commencement of work on such Goods or on such Services, shipment of such Goods, or performance of such Services, shall be deemed an effective mode of acceptance of Buyer’s offer to purchase Goods or Services contained in this Order.  Any acceptance of this Order is limited to acceptance of the express terms of the offer contained herein. Any proposal for additional or different terms or any attempt by Seller to vary any of the terms of this offer in Seller’s acceptance shall be deemed a material alteration thereof, and notification of Buyer’s objection is hereby given. To the extent that this Order is deemed as an acceptance of Seller's prior offer, such acceptance is expressly made on condition of assent by Seller to the terms hereof and shipment of the Goods or beginning performance of any Services by Seller shall constitute such assent.  Any terms or conditions contained in any quotation, acknowledgment, invoice, or other communication of Seller which are additional to or different from the terms of this Order shall be deemed a material alteration thereof and Buyer’s notice of objection is hereby given.

    (b)  A member of Buyer’s Purchasing organization is the only representative of Buyer authorized to issue Orders to Seller or to otherwise bind Buyer to any agreements to purchase from Seller.  Buyer will not be responsible for payment of any invoices which either do not have Order authorization from a representative of Buyer’s purchasing organization or which exceed such Order price authorization.

  2. Prices and Payment:  Prices for the Goods and Services covered under the Order are stated in U.S. dollars, unless otherwise stated on the Order, are firm and are not subject to increase by Seller for the duration of the Order. Each invoice shall reference the applicable Order. Applicable taxes and other charges such as shipping costs, duties, customs, tariffs, and government-imposed surcharges shall be stated separately on Seller’s invoice. Terms of payment shall be net 30 days after receipt of correct invoice or date of delivery, whichever is later, unless otherwise stated on the face of the Order. Seller represents and warrants that the prices charged in this Order and the terms hereof are now, and will at the time of each shipment or performance hereunder by Seller be, no less favorable to Buyer than the prices and terms now and then given by Seller to its customers in transactions involving similar terms in comparable quantities.
  3. Delivery: Time is of the essence in this Order. If delivery of Goods or performance of Services is not completed by the delivery time specified on the face of the Order, Buyer reserves the right, without liability, and in addition to its other rights and remedies, terminate this Order, in whole or in part, upon notice to Seller as to Goods not yet shipped or Services not yet performed. In the event of such termination, Buyer shall have the right to purchase substitute goods or services elsewhere and charge Seller with any additional cost of such substitute goods and services and all other losses Buyer incurs as a result of Seller’s default.
  4. Shipment: If, in order to comply with Buyer’s required delivery date, it becomes necessary for Seller to ship by a more expensive way than specified in the Order, any increased transportation costs resulting therefrom shall be paid for by Seller unless the necessity for such rerouting or expedited handling has been caused by Buyer. If no carrier is specified in this Order, Seller shall use the least expensive carrier.
  5. Freight Terms; Risk of Loss and Title:   (a)     The shipment terms will be those specified on face of the Order.  If no shipment terms are specified on the face of this Order, the Goods shall be delivered on a Delivered Duty Paid (DDP) basis, as defined in the International Chamber of Commerce’s Incoterms 2010, to Buyer’s destination specified on the face of this Order. If the face of this Order designates an F.O.B origin or an ExWork or FCA Incoterm, Buyer will be responsible for freight charges to the destination designated on the face hereof. 

    (b)     Notwithstanding any prior inspections, and irrespective of the Incoterm or destination point designated in this Order, Seller shall bear all risks of loss, damage and destruction to the Goods until final acceptance by Buyer at the destination specified in this Order. Further, Seller shall bear the same risks with respect to any Goods rejected by Buyer or as to which Buyer has revoked its acceptance, from the time of such rejection or revocation. Title to and risk of loss of the Goods shall pass to Buyer upon final acceptance.

  6. Delays:  Whenever any event delays or threatens to delay the timely performance of this Order, Seller will immediately notify Buyer in writing of such event and furnish all relevant details. Receipt by Buyer of such notice will not constitute a waiver of the delivery dates set forth in this Order.
  7. Customs:  Seller will promptly provide Buyer with a statement of origin for all Goods and United States Customs documentation for Goods wholly or partially manufactured outside of the United States.
  8. Export Compliance:  Seller agrees that it will not export, re-export, resell or transfer any export controlled commodity, technical data or software (i) in violation of such limitations imposed by the United States or any other appropriate national government authority; or (ii) to any country for which an export license or other governmental approval is required at the time of export, without first obtaining all necessary licenses or other approvals.
  9. Inspection: (a) All Goods shall be subject to inspection and test by Buyer during and after the period of manufacture and, prior to final acceptance.  If inspection or test is made by Buyer on Seller’s premises, Seller, without additional charge shall provide all reasonable facilities and assistance for the safety and convenience of Buyer’s inspectors.  No inspection or test by Buyer made prior to final acceptance shall relieve the Seller from responsibility for defects or other failure to meet the requirements of this Order.  Nothing contained in this Order shall relieve in any way the Seller from the obligation of testing, inspection or quality control. 

    (b)  In case any Good(s) is defective in material or workmanship, or otherwise not in conformity with the requirements of this Order, Buyer shall have the right either to reject such Good(s), require its correction, or conditionally accept it.  Buyer reserves the right to return such conditionally accepted Goods for credit within a reasonable period of time, which the parties agree is not less than one hundred and twenty (120) days after Buyer’s receipt of the Good(s), in the event that Buyer determines that such Goods do not conform to the requirements of this Order.  Any Goods which have been rejected or required to be corrected shall be replaced or corrected by and at the expense of the Seller promptly after notice.  If, after being required by Buyer, the Seller fails to promptly replace or correct any defective Good(s), Buyer may, (i) at its option, by contract or otherwise, replace or correct such Good(s) and charge to the Seller the cost occasioned thereby, or (ii) without further notice, terminate this Order for default in accordance with the clause herein entitled “Termination for Cause” or (iii) utilize the defective Good(s) and require an appropriate reduction in price. 

    (c) Buyer may accept or reject shipments in accordance with its established lot inspection procedures and specifications.  Where rejection of a shipment is appropriately based on Buyer’s normal inspection level, and where such rejection endangers Buyer’s production schedules due to potential material shortages caused by the rejection, then Buyer, at its option, may charge Seller for the reasonable cost of an above normal level of inspection up to and including 100% inspection of such shipment.  If the Goods Seller supplies are inspected by Buyer using skip lot internal quality control and Buyer passes the Good(s), but later finds it to be non-conforming during actual usage, the Buyer shall have the right to reject the Good(s) and at Buyer’s option require its immediate replacement or repair.

  10. Warranty: Seller expressly warrants that all Goods and Services furnished hereunder shall conform to all applicable specifications, appropriate standards, and any statements of work signed by an authorized representative of Buyer, will be new, and will be free from defects in material and workmanship.  Where design is Seller’s responsibility, Seller expressly warrants that the Goods and Services shall be free from defects in design.  Seller warrants that all Goods will conform to all statements made on the containers, labels, descriptions or advertisement for such Goods, and that all Goods will be adequately contained, packaged, marked and labeled.  Seller warrants that all Goods and Services furnished hereunder will be merchantable, and will be safe and appropriate for the purpose for which Goods or Services of that kind are normally used.  If Seller knows or has reason to know that particular purpose for which Buyer intends to use the Goods or Services, Seller warrants that such Goods and Services will be fit for such particular purpose. The foregoing warranties shall commence on acceptance by Buyer of the Goods or performance of the Services and continue for a period of twelve (12) months or for the period provided in Seller’s standard warranty covering the Goods or Services, whichever is longer. All such warranties shall survive inspection, test, acceptance and use of the Goods and Services.  Seller’s warranty shall run to Buyer, its successors, assigns and customers, and users of products sold by Buyer containing the Goods.  Seller agrees to replace or correct defects of any Goods and Services not conforming to the foregoing warranties promptly, without expense to Buyer when notified of such nonconformity by Buyer. In the event of failure of Seller to correct defects in or replace nonconforming Goods or Services promptly, Buyer, after reasonable notice to Seller, may make such corrections or replace such Goods and/or Services and charge Seller for the cost incurred by Buyer in doing so.  The foregoing remedies are in addition to all other remedies available to Buyer at law, in equity or under this Order.
  11. Changes:  (a)  Buyer shall have the right at any time to make changes in drawings, designs, specifications, materials, packaging, time and place of delivery and method of transportation.  If any such changes cause an increase or decrease in the cost, or the time required for the performance, an equitable adjustment shall be made, provided that Seller has submitted to Buyer a claim in writing for such adjustment within ten days following receipt by Seller of the change ordered. If Seller makes a timely claim for adjustment, the parties shall negotiate such adjustment, if any, in good faith, but irrespective thereof, Seller shall proceed without delay with performance under the Order as changed.

    (b)  Seller shall not be entitled to any adjustment in price or time for performance until a duly authorized representative of Buyer’s Purchasing organization has agreed in writing to such adjustment.  No change shall be initiated by Seller without written approval of a representative of Buyer’s Purchasing organization. Any change to the Order implemented by Seller prior to such written authorization of such change shall be at Seller’s risk. 

  12. Termination without Cause: Buyer reserves the right to terminate this Order, in whole or in part, at any time without cause upon giving written notice to Seller.  Upon such termination, Seller shall immediately stop all work hereunder, and shall immediately cause any of its suppliers or subcontractors to cease such work.  Seller shall be paid a reasonable termination charge consisting of a percentage of the order price reflecting the percentage of the work performed prior to the notice of termination, plus actual direct costs resulting from termination where such materials cannot be used for another purpose or returned to the vendor thereof.  In no event shall such termination charges exceed the total price for the Goods and Services to be purchased under the applicable Order. Seller shall not be paid for any work done after receipt of the notice of termination, nor for any costs incurred by Seller, Seller's suppliers or subcontractors which Seller could reasonably have avoided.
  13. Termination for Cause: Buyer may cancel this Order, in whole or in part, without liability, except for its obligation to pay for Goods previously delivered and accepted and Services previously performed and accepted, by notice to Seller if: (a) Seller shall become insolvent or be unable to pay its debts as they mature, (b)  a petition in bankruptcy is filed by or against Seller, an assignment for the benefit of creditors is made by Seller or a receiver of Seller’s assets is appointed, (c) Seller fails to perform any of its obligations under the Order, including failure to deliver the Goods and/or perform the Services within the re­quired time period, (d) Seller fails for any reason to make progress with respect to its obligations so as to en­danger performance of the Order in accordance with its terms or (e) Seller delivers any Goods or provides any Services which fail to comply with all warranties under this Order. In the event Buyer cancels this Order in whole or in part as provided herein, Buyer may procure upon such terms and in such a manner as Buyer may deem appropriate similar goods and/or services, and Seller shall be liable to Buyer for any costs of such similar goods and/or services which are above those prices specified in the Order. In addition, Buyer shall have all remedies available by law and in equity.
  14. Insurance: If requested by Buyer, Seller shall procure: (1) all risk property insurance in an amount equal to 110% of the full replacement cost of the goods, covering the Goods while in transit from Seller’s shipment point to the destination point; (2) workers compensation insurance covering all persons em­ployed in connection with the performance of the services in statutory limits; and (3) general liability insurance against all claims for personal injury, death or property damage occurring as a result of or in connection with the Services performed by or Goods furnished by Seller in an amount of not less than $1,000,000 for injury or death arising out of any one occurrence and $1,000,000 for damage to property prior to performance of the Services. All such insurance shall be procured by Seller from a carrier acceptable to Buyer, with loss payable endorsements to Buyer and, except with respect to workers compensation insurance, shall name Buyer as an additional insured thereunder. Seller shall provide Buyer with a certificate evidencing such insurance prior to shipment of any Goods and performance of any Services, which certificate shall contain the insurer’s agree­ment to provide 30 days’ written notice to Buyer prior to cancellation or modification of such insurance.
  15. Indemnification:   Seller shall defend, indemnify and hold harmless Buyer, its agents, successors and assigns and their respective customers from and against any and all actions, claims, de­mands, suits, losses, costs (including attorneys’ fees and costs), damages, judgments and expense of every kind and nature arising from the following: (a) death, personal injury and/or property damage (including, with­out limitation, loss or damage to electronic information) resulting or alleged to have resulted in any way from the Goods or Services provided pursuant to the Order; (b) Seller’s negligence, willful misconduct or other legal fault; and (c) any failure of the Goods delivered and/or Services provided under the Order to comply fully with, or any other breach of, any of Seller’s warranties, agreements or undertakings contained in the Order. Seller shall further defend and indemnify Buyer from and against any loss, liability, damage or expense, including, without limitation, all attorneys’ fees and costs, incurred by Buyer and its customers, successors and assigns arising out of any claim, suit or proceeding that the Goods or Services or any part thereof infringes any patent, trademark, copyright, trade secret, or other intellectual property and pay any final judgment entered in or any settlement reached in any such claim, suit or proceeding. In the event such a claim, suit or proceeding is commenced, Seller shall promptly procure for Buyer a license to use the Goods, at no cost to Buyer, or mod­ify the Goods or Services such that they conform to all specifications and all other applicable terms and condi­tions of the Order. Seller’s obligation to indemnify Buyer shall not apply to any liabilities or damages arising from Buyer’s sole negligence.
  16. Confidentiality:   Seller shall treat as proprietary and confidential all designs, specifications, drawings, samples and any other information (“Confidential Information”) furnished to Seller by Buyer. Seller shall disclose Confidential Information only to those em­ployees of Seller with a need to know and who are subject to a binding agreement to protect the confidentiality thereof and shall not copy such information or disclose such information to any other individual or entity without Buyer’s prior written permission. Seller shall use the confidential information only to provide the Goods or Services required by this Order. Upon completion or termination of this Order or when so directed by Buyer, Seller shall return all Confidential Information to Buyer. Unless Buyer’s written consent is first obtained, Seller shall not advertise, publish or cause to be published in any manner any statement mentioning Buyer, or the fact that Seller has provided or contracted to provide to Buyer the Goods and/or Services required by this Order.  
  17. Ownership of Work Product. For purposes of this Order, "Work Product" includes, without limitation, all designs, discoveries, works, devices, masks, models, Service deliverables, inventions, products, computer programs, procedures, improvements, developments, documents, information and materials made, conceived, or developed by Seller, alone or with others, which result from or relate to the Services performed or Goods delivered pursuant to this Order, and all copies thereof. Standard Goods manufactured by Seller and sold to Buyer without having been designed, customized, or modified for Buyer do not constitute Work Product. Seller hereby agrees to irrevocably assign and transfer to Buyer and does hereby assign and transfer to Buyer all of its worldwide right, title, and interest in and to the Work Product including all associated intellectual property rights. Buyer will not have rights to any works conceived or reduced to practice by Seller which were developed entirely on Seller's own time without using equipment, supplies, facilities, or trade secret or Buyer’s Confidential Information.
  18. Buyer Property:  Title to all tooling, equipment, dies, molds, fixtures, patterns,  and materials furnished or paid for by Buyer, or which have had their cost amortized in connection with this Order shall at all times be deemed Buyer’s property (“Buyer Property”).  While in Seller’s custody or control, Buyer Property shall be held at Seller’s sole risk and shall be kept insured by Seller, at Seller’s expense, in an amount equal to the replacement cost with loss payable to Buyer. Seller agrees that it will follow reasonable industrial practice in the identification and maintenance of property control records on all such Buyer Property.  Buyer shall have the right, at such reasonable times as it may choose, to enter Seller’s premises to inspect any such Buyer Property.  Seller agrees that it will use Buyer Property only in connection with this Order and will not use any such Buyer Property for any other purpose or reveal any such information relating to Buyer property to anyone without Buyer’s prior written approval.  Buyer does not warrant the accuracy of the Buyer Property.  Upon completion or termination of this Order, or upon Buyer’s request, all Buyer Property shall be returned to Buyer in as good condition as when received ordinary wear and tear excepted. 
  19. Remedies:  Buyer may exercise, in addition to any rights or remedies established in this Or­der, all rights and remedies available to it under law and in equity. Such rights and remedies of Buyer shall be cumulative.
  20. Buyer’s Audit Rights:  Buyer shall have the right to inspect and audit Seller’s books and records pertaining to the performance of this Order, at all reasonable times, with five (5) days’ written notice, for the purpose of determining the correctness and propriety of amounts billed by Seller.
  21. Assignment and Subcontracting: Seller shall not delegate any duties nor assign any rights under this Order without Buyer’s prior written consent. Any such attempted delegation or assignment shall be void. Seller shall not, without Buyer’s written approval, subcontract for the procurement of any of the Goods and/or Services covered by this Order, except for the purchase of raw materi­als and components in the ordinary course of Seller’s business.
  22. Independent Contractor:  Buyer is interested only in the results obtained under this Order; the manner and means of achieving the results are subject to Seller's sole control. Seller is an independent contractor for all purposes, without express or implied authority to bind Buyer by contract or otherwise. Neither Seller nor its employees, agents or subcontractors are agents or employees of Buyer. Seller shall be responsible for all costs and expenses incident to performing its obligations under this Order and shall provide Seller's own supplies and equipment.
  23. Compliance with Laws.     Seller shall comply with all applicable federal, state, local and governmental agency laws, ordinances, rules and regulations in the manufacture and sale of the Goods and in the performance of Services covered in this Order.
  24. Governing Law: This Order shall be governed by and interpreted in accordance with the law of the state of California without regard to the principles of conflicts of law, provided that any question re­garding copyright, trademark, patent or intellectual property or trade secret matters shall be determined in ac­cordance with federal law.  The parties expressly agree that the provisions of the United Nations Convention on Contracts for the International Sale of Goods will not apply to this Order.
  25. Modifications:  This order shall not be modified, supplemented, qualified, or interpreted by any trade usages or prior course of dealing not made a part of the order by its express terms. No amendments to or modifications of this Order will be valid and binding upon Buyer unless in writing and signed by an authorized representative of Buyer. 
  26. Waiver: The failure of Buyer to enforce at any time any of the provisions of this Order, or to exercise any election or option provided herein, or to require at any time performance by the Seller of any of the provisions hereof, shall in no way be construed to be a waiver of such provisions, nor in any way to compromise the validity of this agreement or any part thereof, or the right of Buyer thereafter to enforce each and every such provision.
  27. Entire Agreement:  This Order, together with any specifications, schedules, exhibits or amendments which may be referred to herein or attached hereto by Buyer, sets forth the complete and final agreement between the parties, and supersedes any and all prior or contemporaneous oral or written communications relating to its subject matter.  Notwithstanding the foregoing, this Order will not supersede or take the place of any written agreement that is signed by both parties and covers the same subject matter as this Order.